Naval treats virtue as compound interest disguised as moral philosophy. His approach strips away the mysticism: “virtues are a set of beliefs that if everybody in society followed them as individuals, it would lead to win-win outcomes for everybody.”
This isn’t about sacrifice. It’s about mathematical optimization. If everyone is brutally honest, deals flow faster. If everyone shows deep integrity, networks scale without friction. Naval sees virtue as rational selfishness: “you don’t need to do that for sacrifice, you don’t need to do that for other people, you can do it just purely for yourself.”
The practical reward is magnetic attraction. “If you’re the kind of person who long term signals ethics and virtues, then you’ll attract other people who are ethical and virtuous.” The alternative is endless competition with predators.
Naval treats Matt Ridley’s “Origins of Virtue” like foundational code. The book explains how cooperation emerges through repeated interactions. “If you understand game theory well… There’s a great book called The Origins of Virtue by Matt Ridley that goes through a lot of this.”
But Naval despises virtue signaling. He sees it as social media theater disguised as morality. People “virtue signal by attacking the whole enterprise” of building equity because they lack rare abilities themselves. This reveals the difference between real ownership and performative display: one attracts builders, the other attracts critics.
His angel investing criteria reduce virtue to testable variables: “intelligence, energy and integrity.” Without integrity, “what you’ve got is a hard working, smart crook.” The mafia story he tells illustrates this: even facing ultimate consequences, “honesty was such a strong virtue between them that even when they were ready to kill each other, they would take each other’s word for things.”
Virtue becomes internal software that runs background processes. You don’t consciously choose honesty in each moment; you’ve automated the decision. This connects to Naval’s broader philosophy: virtue isn’t about being good. It’s about creating abundance where everyone wins.